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Labor Laws - Exempt vs Non-Exempt

Video and Transcript:  UNDER CONSTRUCTION 

  1. Definition of Exempt vs Non-Exempt 
    1. Non-Exempt – entitled to overtime pay 
    2. Exempt-not entitled to overtime pay 
    3. Common misconception:  This is NOT the same as Salary vs Hourly 
    4. Permissible Deductions: (can vary by State) 
     
  2. Fair Labor Standards Act (FLSA) Overtime Rules 
    1. https://www.flsa.com/coverage.html 
    2. Exclusion by statute:  EEs of Movie Theaters, many Agricultural Workers, most Railroad Workers, many Truck drivers 
    3. Three Criteria: 
      1. How Much they are paid 
      2. How they are paid 
      3. What kind of work they do 
    4. Most employees must meet all three "tests" to be exempt: 
      1. Salary Level Test:  Must be paid at least $23,600 per year 
      2. Salary Basis Test:  "Guaranteed minimum" amount of money they can count on receiving in any work week in which they perform any work. 
      3. Duties Tests: Perform exempt job duties 
        1. It is the actual job tasks that must be evaluated, along with how the particular job tasks "fit" into the employer's overall operations. 
        2. There are three typical categories of exempt job duties, called "executive," "professional," and "administrative." 
         
    5. Exempt Executive Job Duties 
      1. Job duties are exempt executive job duties if the employee 
        1. regularly supervises two or more other employees, and also 
        2. has management as the primary duty of the position, and also, 
        3. has some genuine input into the job status of other employees (such as hiring, firing, promotions, or assignments). 
         
    6. Exempt Professional Job Duties 
      1. The job duties of the traditional "learned professions" are exempt.  
        1. These include lawyers, doctors, dentists, teachers, architects, clergy. Also included are registered nurses (but not LPNs), accountants (but not bookkeepers), engineers (who have engineering degrees or the equivalent and perform work of the sort usually performed by licensed professional engineers), actuaries, scientists (but not technicians), pharmacists, and other employees who perform work requiring "advanced knowledge" similar to that historically associated with the traditional learned professions. 
        2. Professionally exempt work means work which is predominantly intellectual, requires specialized education, and involves the exercise of discretion and judgment. Professionally exempt workers must have education beyond high school, and usually beyond college, in fields that are distinguished from (more "academic" than) the mechanical arts or skilled trades. 
        3. Some employees may also perform "creative professional" job duties which are exempt. This classification applies to jobs such as actors, musicians, composers, writers, cartoonists, and some journalists. 
         
    7. Exempt Administrative Job Duties 
      1. The Regulatory definition provides that exempt administrative job duties are 
        1. office or nonmanual work, which is 
        2.  directly related to management or general business operations of the employer or the employer's customers, and 
        3.  a primary component of which involves the exercise of independent judgment and discretion about 
        4.  matters of significance. 
    8. Highly-compensated Employees 
    9. Computer Exemptions 
    10. Outside Sales Exemption 
  3. Salaried Nonexempt Employees  - Depends on the state 
    1. Very easy to make mistakes in Overtime Calculations 
      1. https://www.indeed.com/career-advice/pay-salary/non-exempt-salary  
    2. Example:  Fluctuating Workweek Method vs Fixed Salary to calculate Overtime   
      1. https://www.natlawreview.com/article/time-money-quick-wage-hour-tip-salaried-nonexempt-status  
    3. (can we find where to adjust these settings in iSolved?)